Results: Veidekke ASA Delivered A Surprise Loss And Now Analysts Have New Forecasts

It's been a sad week for Veidekke ASA (OB:VEI), who've watched their investment drop 11% to kr103 in the week since the company reported its quarterly result. Things were not great overall, with a surprise (statutory) loss of kr0.40 per share on revenues of kr8.4b, even though the analysts had been expecting a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Veidekke after the latest results.

See our latest analysis for Veidekke

After the latest results, the twin analysts covering Veidekke are now predicting revenues of kr38.6b in 2022. If met, this would reflect a satisfactory 2.5% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to swell 16% to kr7.82. In the lead-up to this report, the analysts had been modelling revenues of kr38.7b and earnings per share (EPS) of kr8.22 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 6.8% to kr138, with the analysts clearly linking lower forecast earnings to the performance of the stock price.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Veidekke's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 5.2% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Veidekke is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Veidekke's revenues are expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Veidekke going out as far as 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Veidekke has 2 warning signs we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.